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October 1, 2009
Notes from the Pentagon

Economic espionage
Foreign spies are targeting U.S. BlackBerrys and iPhones in a bid to steal economic and trade secrets, as the use of computers for economic espionage is growing, according to the latest annual report from the Office of the National Counterintelligence Executive.

"Cyber threats are increasingly pervasive and are rapidly becoming a priority means of obtaining economic and technical information," the report to Congress stated. "Reports of new cyber attacks against U.S. government and business entities proliferated in fiscal year 2008. Several adversaries expanded their computer network operations, and the use of new venues for intrusions increased."

Read: Report to Congress on economic espionage

The report, recently made public, covers most of 2008 and stated that targeting of mobile telephones increased last year. "Blackberry* and iPhone* - essentially general purpose computers - are susceptible to malicious software... ," the report stated.

Joel F. Brenner, until recently the national counterintelligence executive, has said that in one case a visiting U.S. security specialist had his hand-held penetrated by electronic code as he rode from Beijing's international airport to his hotel.

Chinese economic espionage was mentioned frequently in the report, with one of the most damaging cases involving a researcher at the University of Tennessee who supplied China with Air Force technology on the development of advanced nonmechanical controllers used on munitions-carrying unmanned aerial vehicles. A federal jury in Knoxville convicted professor J. Reece Roth of the crime in September 2008.

Economic spies are seeking both classified and unclassified technology and secrets from the U.S. government and private sector, the report stated, including such targets as dual-use, export-controlled and military items. The most heavily targeted sectors across all agencies included aeronautics, information systems, lasers and optics, sensors and marine systems.

"Cyber threats are increasingly pervasive, and several key adversaries have drastically expanded their computer network operations for intelligence collection and military use," the report said. "Moreover, the techniques used and the growing computer globalization made it increasingly difficult to detect and prevent intrusions."

Also: "According to information compiled during the reporting period, businessmen, scientists, engineers, and academics, as well as state security services from a large number of countries, continued to target U.S. information and technology. The bulk of the collection activity, however, came from a core group of countries."

Federal authorities in the last year uncovered seven cases of Chinese-origin economic spying, involving illegal efforts to obtain technology on space launchers, unmanned aerial vehicles, military aircraft, thermal imaging, missile targeting and military source codes.

Chines Embassy spokeswoman Wei Xin has denied reports that China is engaged cyber activities or espionage. "Anyone making relevant accusations against China is welcome to submit their reliable evidence, and China is ready to provide investigative cooperation so as to counter the common threat faced by the international community," she said.

In response to spying reports, Miss Wei said: "China has solemnly stated on many occasions that China never does anything undermining the interest of others and China advocates cooperation between countries on the basis of fairness, justice, equality and mutual benefit."

Iranian agents were involved in nine cases of economic espionage, including efforts to steal engineering software, telecommunications equipment; electronics and improvised explosives; gas valves; nickel alloy pipes; jet fighter components; and software for running nuclear plants, the report stated, citing Justice Department reports. Other cases involved Indian efforts to obtain missile technology and nuclear testing equipment; Pakistani efforts to obtain materials for nuclear weapons and missiles; a Taiwanese effort to obtain aircraft targeting gear and joint effort by Thailand and United Arab Emirates to steal military aircraft parts.

Disruption weapons
The International Spy Museum is opening its newest exhibit Friday on cyber spying and cyberwarfare called "Weapons of Mass Disruption."

It features Director of National Intelligence Dennis Blair arguing for offensive cyber attack capabilities against foreign states, criminals, hackers and others who could cause devastating damage to the United States and the international system by targeting systems and disrupting or shutting them down.

"In the real world of really skilled hacking and computer attacks, simple defenses are not enough," Mr. Blair states in a video presentation that is the central part of the exhibit. "We have to have an offensive component."

The video also includes several specialists and former intelligence officials.

Former DNI Mike McConnell, who also headed the National Security Agency, is quoted in the video as saying that U.S. cyber security and cyber warfare efforts have been fragmented but that a $17 billion plan under the George W. Bush administration to reform government efforts in the area is moving ahead under the Obama administration.

Mr. McConnell, a retired Navy vice admiral, is quoted in the exhibit as presenting a "nightmare scenario" of a cyber attack on the United States that might be carried out in the heat of the Fourth of July holiday or the winter cold of Jan. 1. It would involve a cyber attack against banks and the electric power grid, shutting down the flow of electricity to homes in the Northeast.

"I would argue this could create chaos," with a relatively small number of people behind the attack and with relatively low cost, he said.

Peter Earnest, museum director and a former CIA officer, said the goal of the new display is to heighten public awareness of the threat posed by cyber attacks.

"These daily attacks can gather intelligence and have the potential to manipulate, disrupt and even control computers and computer networks in our country," he said. "They could possibly damage or even bring down portions of the electrical grid resulting in widespread chaos and the breakdown of law and order, all exacerbated by the deteriorating state of much of our national transportation, communications, financial and water supply infrastructure."

How the PLA Fights
China's armed forces are being transformed from a World War II-style ground army to a modern mobile fighting force more capable of waging advanced warfare against foreign foes or domestic unrest, according to a recently published book on the People's Liberation Army.

"The People's Liberation Army is developing into a hardened and networked army; going from a light infantry force into a mechanized and air mobile one," stated Australia-based PLA specialist Martin Andrew.

Mr. Andrew recently completed the book "How the PLA Fights - Weapons and Tactics of the People's Liberation Army." It was published last month by the Army's Training and Doctrine Command Intelligence Support Activity at Fort Leavenworth, Kan.

The book includes new details on Chinese ground forces modernization efforts and contains a comprehensive listing based on Chinese and Russian sources of Chinese arms and equipment, ranging from pistols to tanks to air defense missiles.

According to the book, China's ground forces were reorganized along the lines followed by the Soviet military beginning in 1986, when the Red Army set up more easily deployed "shock divisions."

"The Soviets, like the NATO armies, had found that armored divisions are too unwieldy in complex terrain and an armored battle group [based around a battalion headquarters] is easier to control and can still execute its mission," the book stated. "The PLA has adopted the philosophy behind this reorganization."

Chinese troops are being formed into air mechanized and fast wheeled forces as a "lance" to break through enemy defenses and strike at rear areas. Heavy tanks would be used, followed by a holding force of heavy mechanized troops used as a "bulldozer blade" to thwart counterattacks.

Recent joint Chinese-Russian exercises in July demonstrated some of these new-style ground force strategies. They were followed by military maneuvers called "Stride 2009" in August and September that showcased the movement of large groups of Chinese military forces over wide geographic areas in live-fire drills.

"For the first time, civilian rail and air transportation are being utilized along with military resources in a long-range multiple deployment exercise," the book stated. "The lessons learned from Stride 2009 will iron out any logistics issues for deploying mechanized units inside China and confirm the PLA's ability to move modern combat power inside its borders."

Key PLA developments include an increase in special operations forces that would be used in a conflict over Taiwan; for enhancing military power projection; and in pre-emptive strikes as part of what the Chinese call "active defense."

"Accordingly, PLA special forces have expanded their role from traditional reconnaissance operations to include counterterrorism, hostage rescue, combat search and rescue and direct attack missions," the book stated.

Several Chinese weapons systems were developed from U.S. or European systems, including China's FB-6A surface-to-air missile that is a knockoff of the U.S. Army's Humvee-mounted Stinger missile called Avenger. China's Z-9 attack helicopter is developed from the Eurocopter AS 365N Dauphin II helicopter that is produced under license by Harbin Aircraft Manufacturing Corp. The helicopter is used for several missions, including attack and reconnaissance versions, and is equipped with a nose-mounted thermal imaging seeker.

Among the more exotic weapons outlined in the book are silenced assault rifles, a gun used for riot control that injects anaesthetic into targets, and a shoulder-fired laser dazzler that can blind enemy troops from about 150 feet away.

China has about 8,000 older main battle tanks and some 1,400 advanced tanks.

The PLA also developed its first indigenous attack unmanned aerial vehicle for surveillance, reconnaissance, fire control, target positioning and precision strike.

Chairman on China
Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, was the highest ranking U.S. military officer to attend a gala reception Tuesday night at the new Chinese Embassy in Washington.

Adm. Mullen told the assembled guests that when he arrived he was greeted by Chinese Ambassador Zhou Wenzhong, who told him "you have many problems," apparently referring to the wars in Afghanistan and Iraq.

"I told him, 'We have many problems,' " Adm. Mullen said, highlighting U.S. government efforts to gain the support of the communist government in Beijing for stabilizing Afghanistan and Iraq.

Adm. Mullen said he was hopeful that military exchanges with China, which were cut off by China last year over anger at U.S. arms sales to Taiwan, will resume fully and that they will contribute to "peace, stability and prosperity" for both the United States and China.

Missile cuts opposed
A group of 11 U.S. senators wrote to Defense Secretary Robert M. Gates this week to urge him not to cut the land-based intercontinental missile force below 450 missiles.

The letter was organized by Sen. Kent Conrad, North Dakota Democrat, whose state includes 150 Minuteman nuclear missiles at Minot Air Force Base.

"We are proud that the ICBM force provides the United States with the most highly cost effective and operationally effective nuclear deterrent in the triad," the senators stated in the Sept. 25 letter. "As we have indicated to the president, we would strongly oppose a reduction below the current force level of 450 missiles, divided into three wings of 150 missiles each."

The lawmakers stated that they are concerned that nuclear cuts, either through a new arms agreement with Russia or the Pentagon's Nuclear Posture Review, could weaken nuclear deterrence.

If U.S. nuclear warheads are cut below 1,100, "there is the potential to damage decades of arms control efforts for both a stabilizing triad and our ability to respond as world events change," they stated.

"The 450 Minuteman ICBM force creates a widely dispersed single warhead target that adds significant stability in a crisis." The bipartisan letter was signed by Mr. Conrad and Democratic Sens. Max Baucus and Jon Tester, both of Montana, Byron L. Dorgan of North Dakota and Mary L. Landrieu of Louisiana.

Republicans who signed included Sens. Mike Johanns of Nebraska, Michael B. Enzi of Wyoming, Orrin G. Hatch and Robert F. Bennett, both of Utah, David Vitter of Louisiana and John Barrasso of Wyoming.

A Pentagon spokesman had no immediate comment.

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